Negative opening likely amid discouraging global cues

The SGX Nifty in early action is looking circumspect as the continued uncertainty about the US-China trade deal combined with the growing inversion of the yield curve in the US are fuelling bearish sentiments. The big news for the day is that on Wednesday the Union cabinet took a major decision on easing foreign direct investment norms. The government notified 100 per cent FDI in insurance intermediaries and also relaxed FDI in single-brand retail trade for companies looking to invest and open retail stories in India. At the time of writing, SGX trading lower by 33 points at 11,014 level. The market participants need to brace for a volatile ride as August series F&O contracts expire today and participants roll over positions to the September series. The bulls need to defend the important support zone of 10,980-11,000. 

The Asian stock indices have drifted lower on Thursday as market participants are seen cautious as the monitor, the US bond market, indicates deepening US yield curve inversion which has fanned fears of recession. Hong Kong’s Hang Seng has slipped 0.71 per cent, the Japanese stock index Nikkei 225 has shed 0.46 per cent and China’s Shanghai Composite has lost 0.36 per cent.

Back home, equity markets snapped their three-day winning streak on account of profit-booking as well as concerns of global economic slowdown. The Nifty slipped 0.53 per cent to 11,046 and Sensex dropped 0.50 per cent to 37.452 level. The broader market indices underperformed the benchmarks, with Nifty Midcap and Smallcap shedding 0.97 per cent and 0.65 per cent, respectively. Among sectoral indices, barring Nifty Realty, Nifty IT and Nifty Media, all other sectoral indices ended in the red, with Nifty Metals witnessing the biggest fall, followed by Nifty Auto. India VIX jumped 5 per cent to 16.8.

The US stocks began the session in the red as a further yield inversion hurt investors' sentiments. However, the stocks showed a significant reversal from the lower levels and ended Wednesday’s session in the green. The Dow jumped about a per cent, the S&P 500 Index added 0.7 per cent and the Nasdaq surged 0.40 per cent. 

The European markets finished mixed on Wednesday as market participants gazed at the growing inversion of the yield curve in the US, which intensified global recession fears. Germany’s DAX and France’s CAC 40 declined 0.25 per cent and 0.34 per cent, respectively, while UK’s FTSE 100 added 0.35 per cent.